Donors renew Vietnam support, offer $2.8 bln
HANOI - Foreign donors pledged a total of
$2.8 billion in fresh aid to Vietnam on Wednesday, adding that
$700 million of that was linked to accelerated economic reform.
Donors commended Hanoi for reducing poverty but expressed
concern the slow pace of economic reform might leave Vietnam
trailing Asia as the region recovers from financial crisis.
In a statement issued after two days of annual talks under the
World Bank Consultative Group, donors welcomed a
government request to work more closely in devising Vietnam's
next five-year plan and a longer-term vision for the country.
Andrew Steer, director of the World Bank in Vietnam, said
there was genuine commitment from Hanoi to open the economy
and he urged the government to quickly implement a three-year
reform agenda drawn up by various ministries.
``Every donor here believed there had been progress in the past
year. Vietnam has done excellent work in preparing the way for
reform,'' Steer said.
``This programme now needs to be implemented.''
Last year donors pledged $2.7 billion in aid to Vietnam. Of that,
$500 million was conditional on accelerated reform, although
none of this money has been disbursed.
Of the fresh aid, the $700 million component would be used to
support the fiscal costs of an accelerated reform programme,
such as retraining for workers laid off from state firms.
Donors had said they expected commitments to remain high
because of Hanoi's pledge to improve the business climate along
with its success in reducing poverty this decade.
FOREIGN INVESTORS WANT ACTION
However, that has been cold comfort to foreign investors
struggling to navigate red tape, high costs and discrimination in
one of Asia's toughest business environments.
Donors have forecast actual foreign investment inflows this year
at $600 million, the lowest level since 1992.
Asked when the government would announce and implement the
three-year reform agenda that covers trade, the private sector,
state companies and banking, Planning and Investment Minister
Tran Xuan Gia said more discussions were needed.
He also emphatically denied that foreign investors had
bombarded Vietnam with complaints at a separate meeting with
government officials on Monday.
Participants at both meetings have said that while the tone of the
talks was positive, it appeared Hanoi was still grappling with the
impact major reforms would have on the ruling Communist
Party's control and protected state-run companies.
Total aid commitments to Vietnam this decade now amount to
some $16 billion, although less than half has been disbursed.
Donors said they were impressed by Vietnam's success in
cutting poverty, even though those gains were now at risk
because of slower growth.
Between 30-45 percent of Vietnam's 79 million people are living
below the poverty line compared with seven out of every 10
Vietnamese in the mid-1980s, the World Bank has said.
At that time central planning policies had driven the economy
into the ground. In 1986, the government adopted
market-oriented economic reforms that kickstarted growth.
But the World Bank has said that unless Hanoi steps up reform,
economic growth could drop to 3.5 percent next year and three
percent thereafter.
Reuters - December 15, 1999.
|